I asked about this originally. I was told unofficially, by a back channel, that this means SYNTHETIC DATA generation. I think the exact method you are describing is not the original intention of this caveat. From a purely copyright point of view, in regard to still images, if you have made any custom alteration at all (which the system is intended for), then I don’t see how any copyright could stick in this case.
Keep in mind, they can’t get blood from a stone. If you are not making money hand over fist, they are not likely to pay a lawyer to try and get some of it.
For more discussion of this kind of thing refer to the Virtual Beings Facebook group.